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Court Error – Bankruptcy Fee Schedule

By: Derek Hawkins//August 12, 2019//

Court Error – Bankruptcy Fee Schedule

By: Derek Hawkins//August 12, 2019//

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7th Circuit Court of Appeals

Case Name: Cranberry Growers Cooperative v. Patrick S. Layng

Case No.: 18-3289

Officials: RIPPLE, MANION, and SYKES, Circuit Judges.

Focus: Court Error – Bankruptcy Fee Schedule

Under 28 U.S.C. § 1930(a)(6), quarterly fees paid by a chapter 11 debtor to the bankruptcy Trustee are based on the debtor’s disbursements. Here, the Bankruptcy Court determined that certain payments made by the customers of Cranberry Growers Cooperative (“CranGrow”) to its lender should not be considered “disbursements” for purposes of that calculation. Patrick S. Layng, United States Trustee for the Western District of Wisconsin (“Trustee”), appeals that determination. CranGrow agrees with the Bankruptcy Court’s interpretation of disbursements, but, for the first time on appeal, maintains that the Bankruptcy Court unconstitutionally applied the recently amended fee schedule in assessing its quarterly fees.

We believe that the language of the fee statute requires that payments made by CranGrow’s customers to CranGrow’s lender be considered disbursements. We also decline CranGrow’s belated invitation to consider the constitutionality of the fee statute. We therefore reverse the Bankruptcy Court’s judgment and remand for further proceedings consistent with this opinion.

Reversed and remanded

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.

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